With a revived bull market allowing biopharma giants to set aside more capital for merger-and-acquisition (M&A) deals over the past year, 2026 will likely see an increase in the number as well as dollar value of such transactions, according to a report released to coincide with the 43rd Annual J.P. Morgan Healthcare Conference. But the M&A surge will not significantly lift initial public offerings (IPOs) out of the doldrums. EY—the professional services firm once known as Ernst & Young—reported a 23% jump in the amount of capital or “firepower” set aside for dealmaking by the top 25 biopharmas, to $1.6 trillion from $1.3 trillion a year ago. The extra firepower fueled a roughly 66% leap year-over-year in the value of biopharma M&A deals during 2025 through November 30, to $149 billion from $90 billion a year earlier, despite a 9% drop in the volume of deals to 76 from 94 in 2024. The firepower amount balloons to $2.1 trillion when $497 billion in firepower is added from artificial intelligence (AI)-enabled applications, diagnostics, and other “medtech” companies. For biopharmas, the extra firepower reflects the increased capital available to buyers as their stock prices rise, thereby raising their market capitalization (share price multiplied by the number of outstanding shares). During 2026, the flow of M&A deals will strengthen into a steady stream, if not a flood, despite a still-sluggish market for initial public offerings (IPOs), Subin Baral, EY global life sciences deals leader, told GEN. Subin Baral, global life sciences deals leader…
